NEW YORK ( TheStreet) -- Equal Energy (NYSE: EQU) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and generally weak debt management.

Highlights from the ratings report include:
  • EQU has underperformed the S&P 500 Index, declining 22.59% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
  • EQU's debt-to-equity ratio of 0.91 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 0.44 is very low and demonstrates very weak liquidity.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Oil, Gas & Consumable Fuels industry and the overall market, EQUAL ENERGY LTD's return on equity significantly trails that of both the industry average and the S&P 500.
  • The gross profit margin for EQUAL ENERGY LTD is currently very high, coming in at 71.30%. It has increased significantly from the same period last year. Regardless of the strong results of the gross profit margin, the net profit margin of -6.40% is in-line with the industry average.
  • EQUAL ENERGY LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. During the past fiscal year, EQUAL ENERGY LTD continued to lose money by earning -$1.34 versus -$1.98 in the prior year.

Equal Energy Ltd. engages in the exploration and production of oil and gas properties in western Canada and Oklahoma. Equal Energy has a market cap of $149.7 million and is part of the basic materials sector and energy industry. Shares are down 29.6% year to date as of the close of trading on Thursday.

You can view the full Equal Energy Ratings Report or get investment ideas from our investment research center.
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